Jane Leung
Jul 21, 2010

China to grow 15 per cent in luxury market : Labbrand Digital IQ

SHANGHAI – Market research and brand strategy agency Labbrand Consulting Shanghai, projects China will achieve 15 per cent growth in the luxury market for 2010.

China to grow 15 per cent in luxury market : Labbrand Digital IQ

This figure compares to four per cent growth in the US and a decrease of 3 per cent in Japan

Digital IQ, compiled in partnership with L2, is a report on prestige brands in China via the digital sphere, which includes digital marketing, social media and search engine optimisation (SEO).

Labbrand estimates that there will be 840 million internet users in China by 2013, compared to the current figure of 384 million. Japan claims only 96 million by 2013.

Three quarters of the wealth in 2015 for the Chinese market is expected to come outside of first tier cities. In the research, 80 per cent of the luxury consumers in China are under age 45. This posts a drastic difference to the 19 per cent in Japan and 30 per cent in the US.

However, luxury brands do not seem to cater to consumers in the digital space in par to the growing ratio in China. The report finds that 20 per cent of the sampled brands do not have a Chinese language site. 90 out of 100 brands do not have e-commerce capabilities. These facts give a huge opportunity for third-party retailers to indirectly sell luxury items on other online shopping portals.

In the Digital IQ ranking, these brands, in order, fulfill the most digital marketing requirements for the top ten list: Lancome, BMW, Estee Lauder, Audi, Clinique, Mercedes-Benz, Clarins, Acura, Cadillac and Wulliangye.

The Automotive and beauty and skincare sectors take the top spot in digital adoption, followed by fashion, watches and jewelery and champagnes and spirits.

Out of many proposals on digital enhancements for luxury brands in China, Labbrand suggests brands to register under the .cn domain, create a Chinese name online and get social. Partnering with local social networking portals such as RenRen, Kaixin001, QZone, setting up microsites, and launching mobile applications are a plus.

Source:
Campaign China

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